Monthly Survey of Manufacturing, October 2020
Manufacturing sales rose 0.3% to $54.1 billion in October, following a 2.2% increase in September. The increase in October was almost entirely attributable to non-durable industries, led by the paper, and petroleum and coal industries. Year over year, sales were down 5.2%.
Manufacturing sales in constant dollars were unchanged, indicating that the increase in October was driven entirely by higher prices.
Non-durable goods industries lead the growth
Paper manufacturing sales rose 5.4% to $2.4 billion in October, the second consecutive monthly increase, on higher sales in the pulp, paper and paperboard mills industries. The increase was attributable to higher prices and demand, and led to a 2.8 percentage point gain in the capacity utilization rate for the industry. Sales in constant dollars were up 5.3%. Sales in current dollars of paper products in October stood 5.1% above February and were up 5.6% year over year.
In the petroleum and coal product industry, sales increased 3.1% to $3.9 billion in October, following a 0.2% decrease in September. Higher prices were responsible for the increase in October as sales in constant dollars fell 0.9%. Excluding September, sales in the industry have been trending upward since April, when sales fell by nearly half (-46.8%) on sharply lower prices and demand due to the pandemic-related shutdown. Petroleum and coal manufacturing sales in October were almost one-third (-29.4%) below pre-pandemic levels in February and were down 39.0% year over year.
Motor vehicle sales rose 1.9% to $4.6 billion in October, following a 2.8% decline in September. Despite the increase, sales were 3.8% below the pre-pandemic level in February and were down 11.7% year over year. In October, motor vehicle inventories were at their lowest level since January 2018 and contributed to the slow recovery in motor vehicle sales.
Sales also rose at primary metal (+2.0%), other transportation equipment (+24.4%) and plastic and rubber product (+2.2%) manufacturers in October.
Following two consecutive gains, sales of chemical products fell 2.5% to $4.3 billion in October. The decline was mostly attributable to lower sales of resin, synthetic rubber and artificial and synthetic fibres, and pharmaceuticals and medicine.
Production in the aerospace product and parts industry were down 5.9% to $1.6 billion in October, following a 15.3% increase in September. Aerospace manufacturers ramped down production due to the collapse in demand and uncertainty surrounding the length of global travel restrictions during the second wave of COVID-19. Production in the industry was one-quarter (-25.1%) below pre-pandemic levels in February. Exports of aircraft and other transportation equipment and parts (-9.3%) also declined in October.
Sales were also down in the motor vehicle parts (-2.3%) and fabricated metal product (-1.7%) industries in October.
Sales up in seven provinces, led by New Brunswick
Manufacturing sales rose in seven provinces in October, led by New Brunswick and British Columbia. Quebec posted the largest decline, followed by Newfoundland and Labrador.
Following a 10.9% increase in September, sales in New Brunswick rose 7.2% to $1.4 billion in October, on higher sales of non-durable goods. However, year-over-year sales were down by almost one-third (-30.4%).
Sales in British Columbia increased 1.5% to $4.7 billion in October, the sixth consecutive monthly gain. Higher sales of paper (+22.0%) and wood (+3.8%) products were primarily responsible for the monthly increase. Sales were up 8.8% in October compared with February and up 8.8% year over year.
Sales in Quebec were down 0.7% to $13.2 billion, following five consecutive monthly gains, mostly attributable to lower production in the aerospace industry.
Sales in Newfoundland and Labrador declined 21.2% to $242.0 million in October, mostly reflecting lower sales of durable goods.
Regina leads the sales growth among selected census metropolitan areas
Manufacturing sales on an unadjusted basis were up in 5 of the 12 selected census metropolitan areas in October, led by Regina. Montréal and Toronto posted the largest declines.
In Regina, sales rose by almost one-third (+30.8%) to $404.8 million on higher sales of petroleum and coal, transportation equipment and paper products. This followed a 20.3% decline in September.
Sales declined 1.0% in Montréal on lower production of aerospace product and parts.
In Toronto, sales were down 0.6% on lower production in the aerospace product and parts industry, as well as lower sales in the machinery industry.
Inventory levels decrease
Following two consecutive monthly gains, total inventories declined 0.4% to $86.5 billion in October. Higher inventories of wood (+3.1%) and plastic and rubber products (+4.1%) were offset by lower inventories in the transportation equipment industry (-2.1%). Total inventory levels in October were 1.3% below their pre-pandemic level in February and were down 1.1% year over year.
The inventory-to-sales ratio edged down from 1.61 in September to 1.60 in October. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Unfilled orders decline
Unfilled orders were down 2.3% to $90.0 billion in October primarily on lower unfilled orders of aerospace product and parts (-3.2%), due to the cancellation or slowdown in orders. This drop brought total unfilled orders of aerospace product and parts to their lowest level since October 2018.
Following a 4.3% increase in September, total new orders declined 3.9% to $52.0 billion in October. New orders decreased in 12 of 21 industries, mainly attributable to the transportation equipment industry (-19.2%).
Capacity utilization rate decreases
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector decreased from 78.4% in September to 77.8% in October.
Capacity utilization rates increased in the paper (+2.8 percentage points), primary metal (+1.1 percentage points) and petroleum and coal product (+0.8 percentage points) industries. The capacity utilization rate in the transportation equipment industry was down 4.4 percentage points, mainly on lower production in the aerospace industry.
Manufacturing employment edged down 0.2% in October.
Advanced preliminary 2019 estimates of the Annual Survey of Manufacturing Industries
Delays in collection, adversely affected by shutdowns ordered due to the pandemic, have required the rescheduling of the release of the Annual Survey of Manufacturing Industries 2019 preliminary estimates and 2018 revised estimates to March 15, 2021. To help reduce the impact on our users, we are providing advanced 2019 preliminary estimates for 3 of the 20 published variables: total revenue is estimated at $784.4 billion; revenue from goods manufactured is estimated at $700.9 billion; and total expenses are estimated at $686.0 billion.
These advanced preliminary estimates will be revised with the official release of the Annual Survey of Manufacturing Industries. For information on why the Annual Survey of Manufacturing Industries estimates differ from the Monthly Survey of Manufacturing, please consult the following document.
Sustainable Development Goals
On January 1, 2016, the world officially began implementation of the 2030 Agenda for Sustainable Development—the United Nations' transformative plan of action that addresses urgent global challenges over the next 15 years. The plan is based on 17 specific sustainable development goals.
The Monthly Survey of Manufacturing is an example of how Statistics Canada supports the reporting on the Global Goals for Sustainable Development. This release will be used in helping to measure the following goal:
Note to readers
While the quality of this month's data remains high, response rates from manufacturers have fallen from the usual 95% to a rate of 88.1% in October. Every effort has been made to supplement this month's data with information from other sources.
Monthly data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified.
Seasonally adjusted data are data that have been modified to eliminate the effect of seasonal and calendar influences to allow for more meaningful comparisons of economic conditions from period to period. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
Trend-cycle estimates are included in selected charts as a complement to the seasonally adjusted series. These data represent a smoothed version of the seasonally adjusted time series and provide information on longer-term movements including changes in direction underlying the series. For information on trend-cycle data, see Trend-cycle estimates – Frequently asked questions.
Both seasonally adjusted data and trend-cycle estimates are subject to revision as additional observations become available. These revisions could be large and could even lead to a reversal of movement, especially for reference months near the end of the series or during periods of economic disruptions.
Non-durable goods industries include food, beverage and tobacco products, textile mills, textile product mills, clothing, leather and allied products, paper, printing and related support activities, petroleum and coal products, chemicals, and plastics and rubber products.
Durable goods industries include wood products, non-metallic mineral products, primary metals, fabricated metal products, machinery, computer and electronic products, electrical equipment, appliances and components, transportation equipment, furniture and related products, and miscellaneous manufacturing.
For the aerospace and shipbuilding industries, the value of production is used instead of the value of sales of goods manufactured. The value of production is calculated by adjusting monthly sales of goods manufactured by the monthly change in inventories of goods in process and finished products manufactured. The value of production is used because of the extended period of time that it normally takes to manufacture products in these industries.
Unfilled orders are a stock of orders that will contribute to future sales assuming that the orders are not cancelled.
New orders are those received, whether sold in the current month or not. New orders are measured as the sum of sales for the current month plus the change in unfilled orders from the previous month to the current month.
Manufacturers reporting sales, inventories and unfilled orders in US dollars
Some Canadian manufacturers report sales, inventories and unfilled orders in US dollars. These data are then converted to Canadian dollars as part of the data production cycle.
For sales, based on the assumption that they occur throughout the month, the average monthly exchange rate for the reference month established by the Bank of Canada is used for the conversion. The monthly average exchange rate is available in table 33-10-0163-01. Inventories and unfilled orders are reported at the end of the reference period. For most respondents, the daily average exchange rate on the last working day of the month is used for the conversion of these variables.
However, some manufacturers choose to report their data as of a day other than the last day of the month. In these instances, the daily average exchange rate on the day selected by the respondent is used. Note that because of exchange rate fluctuations, the daily average exchange rate on the day selected by the respondent can differ from both the exchange rate on the last working day of the month and the monthly average exchange rate. Daily average exchange rate data are available in table 33-10-0036-01.
Each month, the Monthly Survey of Manufacturing releases preliminary data for the reference month and revised data for the three previous months. Revisions are made to reflect new information provided by respondents and updates to administrative data.
Once a year, a revision project is undertaken to revise multiple years of data.
Real-time data tables
Real-time data tables 16-10-0118-01, 16-10-0119-01, 16-10-0014-01 and 16-10-0015-01 will be updated on December 22.
Data from the Monthly Survey of Manufacturing for November 2020 will be released on January 19, 2021.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).